NIFTY CLOSES BELOW THE 10,100 MARK

  • It was a disappointing opening day for the Nifty as it dipped below the support level of 10,141 and closed below the 10,100 mark. A fall below 10,000 opens further downside risks for the Nifty.
  • A lot would hinge on the Confidence motion to be passed later this week. The motion appears to be a non-starter with the AIADMK and the Shiv Sena looking to support the ruling NDA. A sail through will be a boost for the markets.
  • FIIs were net buyers to the tune of Rs.292 crores while DFIs sold Rs.(-192) crore on Monday. Even the overall volumes in the market were quite tepid and that was reflected in the caution ahead of the Fed meet outcome on Wednesday.
  • Both the Dow and NASDAQ are down by over 2% even as Europe lost close to 2% on Monday. Facebook led the fall on data integrity but there is panic over Fed hikes and colour of the post BREXIT situation in Europe. SGX is sharply down!
  • If you want to really bet on the INR weakening on the back of higher trade deficit and CAD, then IT could be a good place to park money. We like TCS, Infosys and Tech Mahindra as de-risked bets at this point of time.
  • In the metal pack, NALCO with its low debt status and valuations much cheaper than the industry benchmark could be a good bet at Rs.65 for targets of 75-80 in the next 1 month. One can start buying selectively.
  • Ahead of the uncertainty in the markets, we recommend playing with caution. While the no-confidence motion may not really dent the NDA, the Fed rate uncertainty could be the overhang. Avoid heavy leveraged positions.
  • We recommend staying light in the market ahead of uncertainty and to keep hedging longs with puts at every bounce.

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